The new league has signed up 41 Indian players
In a way, this is the best of times and the worst of times for Indian cricket.
As the national team re-establishes itself after the World Cup debacle with a historic Test series win over England, the country's cricket is facing its worst ever crisis.
With the rebel Indian Cricket League (ICL) signing up 51 players - more than 40 of them play in the country's highest domestic tournament, the Ranji Trophy - and India's cricket board threatening to ban them from playing for their country, cricket at home has never looked bleaker.
India's domestic cricket standards are poor, and cannot even be compared to Australia's Sheffield Shield or the county circuit in England.
The ICL has made things gloomier with Bengal, Ranji Trophy finalists in the last two domestic seasons, losing half their side to the rebel league.
Bengal cricket authorities are putting on a brave face, saying the "departure" of the seniors will enable youngsters to have a shot at the team now.
But the reality is that without captain Deep Dasgupta, star batsman and India hopeful Abhishek Jhunjhunwala, all-rounder Laxmi Ratan Shukla and opener Subhomoy Das, Bengal simply aren't the same side that made it to the Ranji Trophy final for two consecutive years.
Bengal is not the only casualty. Teams like Hyderabad, Punjab, Haryana and existing Ranji Trophy champions Uttar Pradesh, also look severely depleted.
With seven of their Ranji players joining the rebel league, Hyderabad faces the prospect of having to put together a makeshift Ranji Trophy team in the coming months.
Replacements for players like Ganguly may be harder to find
And with the Indian cricket board indicating the rebel players would be ineligible to don the national cap, India is on the verge of losing some of its most talented potential national team players.
One of them could be the Hyderabad batsman Ambati Rayadu, 21, once touted as a new Sachin Tendulkar in the making. He may not have done justice to his prodigious talent but he certainly has the potential and the opportunity to make it to the Indian team.
Star players like Sachin Tendulkar, Saurav Ganguly, Rahul Dravid and VVS Laxman are certain to retire in a few years and players like Jhunjhunwala and Rayadu are among the prospects expected to fill their positions.
The reverberations of the rebel league are also being felt internationally.
Piqued Pakistan cricket authorities may ban Mohammad Yousuf, the country's most successful batsman in 2005-6, and former captain Inzamam-ul-Haq, from playing for their country too.
In the absence of these two redoubtable players, the Pakistani middle order will look extremely worn out.
Beyond the sub-continent, the New Zealand players' organisation has already extended an olive branch to the rebel league.
Heath Mills, manager of the New Zealand Cricket Players' Association, told a local newspaper that they wanted the International Cricket Council (ICC) to support the league.
New Zealand's cricketers could easily succumb to the financial lure of the league, backed by a leading Indian television network.
The same applies for budding cricket nations like Ireland where stars like Boyd Rankin are always on the lookout for greener pastures to ply their trade in the absence of a lucrative domestic cricket scene.
Ex-Pakistan captain Inzamam-ul-Haq has joined the rebel league
So, is there a way out where the rebel and official cricket authorities can bury the hatchet and let both co-exist peacefully?
There is a precedent in the way the Australian Cricket Board and Kerry Packer ended a similar standoff that shook the cricketing world in the late 1970s.
Australian authorities took back the banned players who had joined Packer's rebel league, and Packer's television channel won Australian cricket telecast rights. Both steps revitalised and revolutionised the game and the way it was broadcast.
A similar solution looks possible if the obdurate Indian Board recognises the rebel league and treats it as an improved version of India's domestic competition. Revenues from ticket sales could also be shared between the two.
But if the face-off hardens, Indian cricket will become the greatest casualty.
The author is a sports historian and author of Twenty-Two Yards to Freedom: A Social History of Indian Cricket.